My Turn: Gas tax increase is good for cities, towns

After lengthy debate on March 6, the New Hampshire House passed HB 617, a bill that increases the gas tax by 4 cents per gallon of gasoline in each of the next three years and then 3 cents in Fiscal Year 2017, for a total 15-cent increase over the current tax of 18 cents per gallon. It is referred to as the 4-4-4-3 plan with Rep. David Campbell of Nashua as the prime sponsor.

This additional revenue would be placed in a separate fund within the constitutionally protected highway fund to be used exclusively for the construction, reconstruction and maintenance of state and municipal roads and bridges – investment that will equate to good jobs across the state, particularly within the construction, engineering, paving and aggregate industries.

The modest change in the tax would result in increased highway block grant funding for municipalities of $3.6 million in 2014 to more than $13 million in 2017 and beyond, for a total increase of $117 million over the next 10 years. For communities working diligently to stabilize local tax rates, this increase is significant. To put it into concrete terms, the plan would mean an additional $250,962 for Bath, $2,982,522 for Concord, $949,347 for Durham, $980,731 for Exeter, $573,305 for Henniker, $1,656,408 for Keene, $1,140,890 for Laconia, $6,851,848 for Manchester, $5,364,972 for Nashua, $2,079,901 for Rochester, $2,195,307 for Salem, and $112,771 for Woodstock. Local taxpayers in every community benefit from the 4-4-4-3 plan.

But much needed additional revenue for municipalities targeted to roadway repairs is not all that this bill provides. The increase would also fund $8.5 million per year for municipal bridge and highway aid programs, fully fund the Interstate 93 widening project, fully fund the state’s grossly underfunded 10-year transportation plan and provide resources to address the 1,600-plus miles of state roads rated in “poor” condition.

The gas tax is a true user fee that has not been increased in over 20 years. If the residents of New Hampshire want decent roads, someone will have to pay for them, and it is only appropriate that the cost be borne by the users. Those who drive less would pay less; those who drive more would pay more.

The House Ways and Means Committee voted March 20 to recommend reducing the gas tax increases from 4 cents/4 cents/4 cents/3 cents over the next four years to simply 4/4/4. This is a mistake. Full implementation of the 4-4-4-3 plan is reasonable and necessary to meet the state’s transportation needs. Here is why:

At 18 cents per gallon, New Hampshire’s gas tax is the lowest in New England.

An important aspect of the tax is that it does not translate penny for penny at the pump. Drive into Maine with a higher gas tax than New Hampshire and you can find lower gas prices there. This is because supply and demand is the primary driver of gas prices, not the tax. When the average driver drives 12,000 miles per year, getting an average of 22.6 mpg, it will cost an additional $79.65 per year after the 15 cents increase is fully implemented. This cost is based on the assumption that the 15-cent increase passes through penny for penny at the pump, which is unlikely.

Even assuming that every penny is passed onto the driver at the pump, the cost of $79.65 is less than what the average New Hampshire driver is currently spending on vehicle maintenance and repairs due to poor road conditions ($323 per year), as reported by TRIP, a national transportation group. And in some areas of the state it is worse. The average driver in the Southern New Hampshire area, including Manchester and Nashua, loses $503 annually due to driving on deteriorated roads, while rough roads cost the average Dover-Rochester-Portsmouth driver $400 annually.

New Hampshire faces an annual transportation funding shortfall of $74 million, more than one third of the major roads are deteriorated, nearly a third of our bridges are in need of repair or replacement, and the state’s rural traffic fatality rate is disproportionately higher than that of other roads in the state.

HB 617, at the 4-4-4-3 level, is a good plan and deserves the support of the Legislature. Opposing it is a hard road to travel for our representatives and senators in Concord.

My concern is that this new "dedicated" fund will just replace replace present revenue in the budget. The old money will just get diverted off to other uses so it does not become a true gain for transportation. I would suggest setting the present funding amount into a dedicated fund and then the new tax revenues gets added to that fund. There is step one of fixing a broken system - use the money for what it is asked for. You can't run a functioning budget if you play 3 Card Monte every day with the money.

Dbenoit wrote:

03/27/2013

Jim, The existing fund must expend 73% of the highway fund on roads and bridges. This can't be changed without legislative action. The bulk of the "diverted" money goes to the Department of Safety which is allowed by the State constitution. The gas tax hasn't been raised in 22 years! The sharp increase is due to not adjusting the fund for so long.

BestPresidentReagan wrote:

03/27/2013

tax & spend democrats.....why is it that the only solution to their perceived problems is to TAX MORE?